Email   Print   Share By CaPT. Amanda Tyma McNeil, III Corps Legal Assistance Attorney

Facebook Digg Delicious May 17, 2012 | News

Service members are often targeted by businesses around military installations because they have a steady paycheck. Given that a personal vehicle is the biggest purchase for many young Service members, there are many important factors to consider when purchasing a used vehicle.



Do your homework

Getting the right car for your needs and budget is important. Unless you are going to pay cash for the car up front, spend some time researching different financial options available to you before going to a dealership. Consider credit unions and banks where you can find a better interest rate than the financing the dealership will offer you. When it comes time to pick the type of vehicle, there are many resources available to help: the Kelley Blue Book at www.kbb.com and www.consumerreports.org. Make sure to consider the cost of gas and any repairs the vehicle might need. You should test drive the vehicle and have an expert check for defects, and be careful about giving the dealership your license because they may use it to run your credit report. Get everything in writing, and don’t rely on oral agreements. Do not sign anything until you are ready to buy, and get copies of everything that you sign. If you have questions about the contract, bring it to the legal assistance office and look over it with an attorney before signing.



“As-Is” or with a warranty

The Buyer’s Guide should be posted on any vehicle being sold saying if there is any warranty on the vehicle or if the vehicle is being sold “As-Is,” meaning the vehicle has no warranty and the seller is not responsible for repairs. Ask about warranties or service plans for the vehicle. If there is a warranty, you should know what percentage of parts/labor costs are covered, how much the deductible is, which systems are covered and for how long, and if there is still a manufacturer’s warranty. After the purchase, the Texas Lemon Law can provide assistance to repair a warranty-related problem if a used vehicle is still covered by the manufacturer’s original warranty (not an extended service contract), or if the problem started while under warranty and it continues to exist.



Title

Before you buy the vehicle, you should get the Vehicle Identification Number, check the odometer reading, total loss history, salvage history and title history with the Texas Department of Motor Vehicles available at www.txdmv.gov/protection/buying_vehicle and the National Motor Vehicle Title Information System available at www.vehiclehistory.gov. When buying a vehicle you need to find out if the seller has a clean title, file Form 130-U to apply for title to be transferred to you, pay all required fees, record the VIN and seller’s information for future reference and ask for the car’s registration receipt.



What happens if there is a title problem

Legal issues can arise if a buyer signs a purchase agreement and loan paperwork before they confirm that the seller has good title to a vehicle. The dealerships should require the title before any transactions are complete. Problems arise when the dealership sells the vehicle to another buyer before it is confirmed that they have a good title to the vehicle.

The scenario begins when the buyer applies for financing for the vehicle and signs the paperwork. If there is a separate organization lending the buyer money to purchase the car, the lender will generally have a clause in the financial agreement saying the interest rate will be a set amount as long as the dealership gets the title to them within 30 days. If not done in time, the lender will raise the interest rate for the buyer, and it can be a substantial expense over the life of the loan. In addition to the higher interest rate, the buyer will not be able to register the vehicle or get permanent plates.

The Texas Transportation Code only gives dealerships 20 working days from the date of the sale to file all documents necessary to transfer title and register the vehicle in the buyer’s name with the county tax assessor-collector’s office after the sale of a vehicle. The late fee for the 20-day deadline is $10 if the paperwork is not filed within 60 days, and $25 for each 30-day period after that. The DMV allows dealerships to transfer title within “a reasonable amount of time,” but this doesn’t protect you as the consumer. Do not buy a vehicle until you know you or the lender will be getting the title right away.



What to do about a Title Problem

The TXDMV has a consumer complaint form that can be filled out to initiate an inquiry. Gather all documents about the transaction, fill out the complaint and sign it. It can be scanned and emailed to mvdscancenter@txdmv.gov or faxed to (512) 302-2328. An investigator for the TXDMV will contact the dealership and find out what steps they have taken to get the title.

If you have purchased a vehicle and have been unable to get a title and have made attempts to resolve the issue with the dealership, you can make an appointment with the legal assistance office at 287-5297 to discuss your legal rights, remedies and responsibilities. During the process, keep track of all conversations you have while attempting to resolve the issue.